Time to get cracking on your retirement goals
Article content
This article was created by MoneyWise. Postmedia and MoneyWise may earn an affiliate commission through links on this page.
Advertisement 2
Article content
You’ve been watching the cost of living tick up, and wondering if your nest egg is going to be enough — don’t worry. You’re not the only one.
Article content
A recent study by BMO found that Canadians believe they need $1.7 million to retire — which is up 20 per cent since 2020. Inflation, while on the decline, has Canadians worried, with 59 per cent of those surveyed believing the current economic conditions will impact their ability to reach their retirement goals.
If you are looking at your account with concern, know that you still have options. Now is the time to move towards your retirement goals.
Pay off any debts
Before you start putting some funds aside, make sure you’ve either settled or have a plan for paying off all your debts.
Advertisement 3
Article content
This could include credit card debt, the mortgage on your house or even the remaining balance on a student loan.
You don’t want to keep racking up on interest charges while trying to save — especially with rates as high as they are currently. Loan and mortgage interest rates have already risen sharply after the Bank of Canada raised rates eight times since March 2022.
If you’ve got multiple lines of credit to take care of, look into your options and start reducing your debt load. You could try negotiating with your lender or consider a debt consolidation plan that keeps you on track and with a lower interest rate.
Use the right investment accounts
Does your employer offer a pension or matching Registered Retirement Savings Account? Or are you getting your own tax breaks by contributing to your own personal RRSP account?
Advertisement 4
Article content
If you don’t have a pension through your employer, look into opening your own RRSP and a TFSA. Decide which option works best for you and start shuffling funds into your preferred retirement vehicle.
RRSP vs TFSA: Which is best for you?
- RRSP: This retirement account allows you to divert some of your pre-tax income into a Registered Retirement Saving Account. This reduces your taxable income, so the higher your income is, the bigger your tax savings are. The great part is your money grows tax-free until you withdraw it in your retirement years. Your employer may offer an RRSP with matching contributions. You can also set one up on your own and contribute to it. The amount you can contribute is based on your deduction limit and unused contribution room — which you can find on your notice of assessment from the Canada Revenue Agency.
- TFSA: This savings and investing vehicle lets you pay taxes upfront for your contributions, but when you withdraw your money in retirement, your earnings are tax-free. There’s a limit on the amount of money you can contribute each year, but the unused contribution room rolls over, so it might be time to play catch-up. If you don’t have a TFSA open, consider opening one today.
Advertisement 5
Article content
Look for more sources of income
Instead of just stashing a bit of money from your paycheque into your retirement account, consider investing it instead.
Although the stock market’s been rocky lately, this could be a good opportunity to buy shares while they’re cheap. Consider building your portfolio with sectors that traditionally perform well throughout economic cycles, like health care, utilities and consumer staples.
Another option is to work additional hours with a side hustle, so you can put away the extra cash into savings or investments.
Research from the Direct Sellers Association of Canada found that two in five Canadians pursued a side hustle in 2022, with inflation being a big motivating factor.
Advertisement 6
Article content
If you are unsure where to start, consider using your existing skills to bring in more income. Online marketplaces for freelance services like Fiverr can help you find those looking for your skills and talent.
Another simple way to bring in cash is by renting out a property you own or reselling items on eBay or Amazon. Instead of selling your things, you can also earn cash back, and even $10 for free, by joining rewards apps like Ampli.
This article was created by Wise Publishing. Wise is devoted to providing information that helps readers navigate the complex landscape of personal finance. Wise only partners with brands it trusts and believes may be helpful to the reader. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Comments
Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.
Join the Conversation